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Jakarta Post

Logistic costs in Indonesia remain high

  • Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Tue, July 3, 2018   /   02:00 pm
Logistic costs in Indonesia remain high A maritime fast route ship berths at Tanjung Perak Port in Surabaya, East Java. (tempo.co/File)

Logistic costs in Indonesia are higher than those in other countries. Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) chairman Wahyu Utomo said 72 percent of logistic costs went to transportation.

Citing data from the Logistic Report Index 2016 by the World Bank, Wahyu said Indonesia was in 63rd position out of 160 countries in the report when it came to logistic costs.

The report measured several aspects, including efficiency, infrastructure and logistics service quality. Meanwhile, in ASEAN, Indonesia ranked fourth, after Singapore, Malaysia and Thailand.

Wahyu identified a number of factors that had caused high transportation costs.

First, many drivers of logistics vehicles that transported goods from Java to outside Java  returned with empty vehicles, while using trucks was more costly than trains, ships and planes.

He suggested that the government boost its maritime highway program to improve connectivity between Java and other regions.

He added that the integration of transportation and special economic zones could potentially cut logistic costs. (bbn)